Truthfully, I have been dreading writing this report– and also dreading publishing it. This month we had negative progress, and that’s the last thing I want to publish. Not only is it somewhat embarrassing, but it’s also, possibly, negative signaling to customers and contractors who may take it as a sign that the end is near. There are many things to be optimistic about, and I’m here to move Code For Cash forward.
What do we do, again?
- We are a community of freelance (and fte) software developers
- We are a job search tool that is niche-focused on software developer jobs
- We do agency-style software development
Revenue for month 8
Total revenue: $23,387.04
Recurring revenue: $3,000
Let’s compare revenue to last month.
MRR: $3,000 vs. $4,200: -28.5% M/M increase in MRR
Total Revenue: $23,387.04 vs $66,500: -65% M/M increase in total revenue
The total revenue drop was expected, and is not actually a disappointment; last month, I mentioned that we saw a higher than average spike in revenue due to completing milestones on several projects. But, the MRR drop? Oh god, what a total bummer.
What caused the MRR drop? Client who was on a high-MRR plan canceled service. Why? This high-value client kept emailing and calling over the weekend; I usually dropped everything and answered, to the dismay of my friends/family. This time I decided not to– I was burned out. Essentially, client fired me. ENTIRELY my fault for not communicating and setting expectations properly.
The good news
We sold 392 books. We got up to #3 in the Kindle bestsellers category for “Software Development”. However, this came at a cost. We cranked up the advertising and it cost on average $2.85 for someone to download a book. Just guessing: If 50% of the people who buy the book, end up opening it, and then 10% of those people end up actually reading it, that means it costs about $57 to acquire a reader. I actually feel like these economics are promising…in fact, they’re way, way better than Reddit ads.
More good news
We are in “trial” with many coding bootcamps; their students are getting tons of value of leveraging us as a tool in their job search.
Accountability – last month’s goals – how’d we do?
Find a predictable channel for acquiring hiring manager customers.
This didn’t go great. Tried tons of different channels, but haven’t discovered any scalable traction channels yet. Believe it or not, the best client/hiring manager channel we currently have is the one I wrote about extensively in the book… Craigslist. But it’s not exactly scalable without violating their TOS. Here are some other channels we tried…
- Hiring a Harvard Business School person to write a case study for us
- Emailing people
- Cold calling people
- Reddit ads
- Printing 500 copies of the case study and distributing around the Flatiron (startup) district of Manhattan
- Distributing copies of the case study at an AWS event
We are still working on developing a scalable strategy. This is the most important thing for us to do. We already have a predictable (expensive) channel for sourcing developers, which is currently paused, because the bottleneck in our business is original projects. When we have too many original projects, we need more developers. Right now that’s not the case.
In lieu of finding a scalable strategy for acquiring hiring manager customers, we focused on something we can control: spidering more developer job boards and adding them to the database.
Bad job leads are in red. Good job leads are in blue.
Slack is really at the core of our community. Why?
- We do job alerts via Slack. (You customize your alerting preferences, including positive and negative keywords, via the webapp).
- We have cool Slack extensions. /keywords @username lets you see someone else’s skills; /skill aws,python lets you see the @usernames of members who do both AWS and python. Finally, /timelogs @username lets you see your time chatting with @username, inbillable increments. (This is the coolest new feature – a serious time saver!)
Unfortunately, Slack was randomly killing some of our services due to reaching the integration limit, so we ponied up the extremely expensive monthly fees. Yes, we now have “upgraded” Slack.
This has changed the cost of delivering the service, so we changed our fee structure. We immediately raised the price for individual users to $200/month. This had two effects:
- Way fewer people are signing up.
- The few people who are signing up at this price point are extremely high quality and I can put them to work immediately on client projects.
Ultimately, we may be able to reconcile the costs of delivering the service and an appropriate profit margin and lower our monthly fees soon (I’m sure this is going to inspire exactly none of you to signup, but oh well. Transparency.). The $200/month was a bit of a knee jerk reaction, but it’s working okay. Remember, the cost of delivering the service also includes us paying human intelligence workers 10¢ for each job, to do manual review and add metadata that isn’t always explicitly present in the listing (1099, w2, onsite, remote, flag if we accidentally pick up a non-tech related jobs, etc.). Once we have a big enough corpus we may be able to do better machine learning and reduce those costs… but for now, the costs are
One more cool thing:
We have a client called WorkReduce. They’re an adtech company and they take jobs that require a human workforce and lower costs for companies by distributing them remotely.
WorkReduce did something interesting: they have one task that they pay humans on the order of 75¢ per task. It’s taking a page that previews multiple sizes of ad creatives, taking screenshots of it, cutting up the screenshots in Photoshop so that each size creative is a separate picture, and then uploading them into Salesforce. We were able to automate this for them, and they paid us a small upfront fee for integration into Salesforce as well as a per-task fee (25¢) for each successful task.
Let’s look at the benefits of this:
- Developers can get paid a minimal upfront fee and also receive passive income (50%+ of developers I know are looking for passive income while also bringing in guaranteed money… solves a huge problem)
- Company lowers their costs and increases automation. Company gets to market faster and with lower capital expenditure. Company becomes valued with 10x SaaS-style valuations instead of 1x service company valuations.
I feel like this is extraordinarily win-win-win.
We’re calling it Software as a Service as a Service, or SaaSaaS. We’re also in the process of building a serverless-marketplace for this– one new team member is working on this subsidiary initiative fully for SAFE, at 2x his normal hourly rate.
Next steps for us? Figuring out exact costs to deliver monthly service and decrease monthly fee so that we see a reasonable, but not exorbitant, margin of profit.